Your Guide To Federal Tax Reform

Legislators are now poised to overhaul the U.S. tax code for the first time in three decades. Keep track of the latest developments in the path towards reform with this one-stop guide to our research and analysis. Click one of the tabs below to explore.

Introducing the Tax Foundation’s 2018 Tax Reform Calculator

Details of the Conference Report for the Tax Cuts and Jobs Act

Preliminary Details and Analysis of the Tax Cuts and Jobs Act

Introducing the Tax Foundation’s 2018 Tax Reform Calculator

February 8, 2018

The Tax Foundation's 2018 tax reform calculator shows you how the Tax Cuts and Jobs Act will impact take-home incomes, taxes owed, and more.

New York Taxpayers Must Pay for Ill-Advised Lawsuit Seeking Tax Cuts for Wealthiest Residents

January 26, 2018

New York, New Jersey, and Connecticut are pursuing a questionable legal strategy to overturn the cap on a federal tax deduction that benefits the wealthy.

More States Considering Dubious SALT Charitable Contribution Workaround

January 25, 2018

California's plan to circumvent the new state and local tax deduction cap is dubious, but now Illinois, Nebraska, Virginia, and Washington are considering similar plans.

State Strategies to Preserve SALT Deductions for High-Income Taxpayers: Will They Work?

January 5, 2018

The scramble to restore the full state and local tax deduction for high-income taxpayers has resulted in inventive proposals that, for both legal and practical reasons, are unlikely to succeed.

Retirement Savings Left Largely Untouched by Tax Reform

January 3, 2018

While rumors flew around Washington in the fall that the Tax Cuts and Jobs Act would dramatically impact retirement savings accounts, the plan has made only a few minor modifications.

SALT Update: Property Tax Prepayments Need an Assessment

December 27, 2017

States Estimating Revenue Increases from Federal Tax Bill; Montana One Exception So Far

December 21, 2017

Does Your State’s Corporate Income Tax Code Conform with the Federal Tax Code?

December 20, 2017

Whether your state's corporate income tax code conforms to the federal corporate income tax code matters a great deal for how the Tax Cuts and Jobs Act will impact revenue in your state.

Pass-Through Deduction Won’t Flow Through to Most States

December 19, 2017

For policymakers in most states, the fact that the pass-through deduction doesn’t affect AGI should come as a relief. For those in the six states which use federal taxable income as their starting point for conformity, decoupling from the provision is an entirely viable option.

Who Gets a Tax Cut Under the Tax Cuts and Jobs Act?

December 19, 2017

How would the Tax Cuts and Jobs Act impact different households? Check out our sample taxpayers to see what would change if the bill is enacted.

The Tax Cuts and Jobs Act: The Impacts of Jobs and Incomes by State

December 18, 2017

Overall, the Tax Cuts and Jobs Act is projected to add 339,000 new jobs to the U.S. economy and boost average after-tax incomes for middle-income families by $649.43. Here's how jobs and after-tax wages will be impacted in your state.

Preliminary Details and Analysis of the Tax Cuts and Jobs Act

December 18, 2017

According to the Tax Foundation’s Taxes and Growth Model, the Tax Cuts and Jobs Act would lead to a 1.7 percent increase in GDP over the long term, 1.5 percent higher wages, an additional 339,000 full-time equivalent jobs, and cost $1.47 trillion on a static basis and by $448 billion on a dynamic basis.

The Tax Cuts and Jobs Act: Preliminary Economic Analysis

December 18, 2017

According to the Tax Foundation’s Taxes and Growth Model, the Tax Cuts and Jobs Act would lead to a 1.7 percent increase in GDP over the long term, 1.5 percent higher wages, an additional 339,000 full-time equivalent jobs, and cost $1.47 trillion on a static basis and by $448 billion on a dynamic basis.

Prepaying SALT isn’t an Option

December 17, 2017

As the Tax Cuts and Jobs Act seeks to simplify the tax code, a last-minute provision closed a potential new tax-planning strategy germinating before the bill even passed.

Conference Report Limits on Interest Deductions

December 17, 2017

There is no good reason to eliminate interest deductions to permit expensing. Expensing is a key element of any tax system which seeks to put all economic activity on a level playing field.

Under Conference Agreement, Fewer Households Would Face the Alternative Minimum Tax

December 16, 2017

The Tax Cuts and Jobs Act will temporarily reduce alternative minimum tax liability, but retain the complexity inherent to the tax.

Details of the Conference Report for the Tax Cuts and Jobs Act

December 15, 2017

Tax Cuts and Jobs Act Puts the U.S. with its International Peers

December 15, 2017

If enacted, the Tax Cuts and Jobs Act would put the U.S. corporate tax rate more in line with its international peers at 13th highest of 35 OECD countries.

House and Senate Bill Limits on Interest Deductions

December 13, 2017

High-Tax States are Inconsistent on the State and Local Tax Deduction

December 12, 2017

If the state and local tax deduction is necessary to prevent double taxation, why don’t states offer a deduction for federal and local taxes?

Does Your State’s Individual Income Tax Code Conform with the Federal Tax Code?

December 13, 2017

As the federal government continues to debate tax reform, states, and many taxpayers, are asking an important question: How is my state’s tax code impacted? The exact impacts won’t be known until the federal bill is finalized, but a good place to start is understanding the issue of conformity.

Three Points on the Mortgage Interest Deduction

December 8, 2017

Replacing the 20 Percent Corporate Rate with Rates of 21 or 22 Percent Has Real Economic Consequences

December 8, 2017

Seven Things States Should Monitor in the Federal Tax Bill

December 4, 2017

Important Differences Between the House and Senate Tax Reform Bills Heading into Conference

December 2, 2017

The House and Senate have both passed legislation that would overhaul the federal tax code. Learn about the key differences between the two bills.

Key Changes in Senate Tax Reform Bill Heading into the Vote-a-Rama

December 1, 2017

A brief summary of the most notable provisions of the Senate Tax Cuts and Jobs Act in the form in which it enters the “vote-a-rama.”

JCT’s Dynamic Score is Positive But Underestimates Economic Benefits

November 30, 2017

The Joint Committee on Taxation (JCT) dynamic scoring estimate of the Senate’s Tax Cuts and Jobs Act confirms that tax changes impact economic growth. While JCT’s estimates are positive, there is reason to believe that the tax plan would produce even greater dynamic effects than its analysis shows.

International Provisions in the Senate Tax Cuts and Jobs Act

November 28, 2017

The Senate’s version of the Tax Cuts and Jobs Act (TCJA) includes several important changes to the taxation of multinational corporations.

Visualizing the Static Impact of the Tax Cuts and Jobs Act on 25,000 Taxpayers

November 28, 2017

Senate Tax Reform Bill Restricts Choice of Which Shares to Sell First

November 27, 2017

Who Gets a Tax Cut Under the Amended Senate Tax Cuts and Jobs Act?

November 21, 2017

Here's how the individual income tax provisions of the amended Senate's Tax Cuts and Jobs Act would impact individuals and families across the income spectrum.

NCSL May Revisit Stance Fighting State & Local Tax Deduction Repeal

November 20, 2017

The National Conference of State Legislatures may revisit a decision to reject tax reform that repeals the state and local tax deduction.

Federal Tax Reform Might Push New Jersey to Reform Tax System

November 20, 2017

New Jersey has the worst state business tax climate of the 50 states and the third highest state and local tax burden. If federal tax reform prompts New Jersey to overhaul its tax code, it’s long overdue.

Are Pass-Through Businesses Treated Fairly Under the Senate Version of the Tax Cuts and Jobs Act?

November 17, 2017

A more careful look shows that the Senate Tax Cuts and Jobs Act doesn't put pass-through businesses at a disadvantage compared to C corporations.

Understanding JCT’s New Distributional Tables for the Senate’s Tax Cuts and Jobs Act

November 16, 2017

Much attention is being paid to distributional tables released by JCT on the Senate's Tax Cuts and Jobs Act, but their results don’t quite seem to show what some are suggesting. While the results appears to show a tax increase for some lower-income filers, this is due to the unique nature of the individual mandate and the premium tax credits available under the Affordable Care Act.

The House Takes a Big Step Forward on Tax Reform

November 16, 2017

The House of Representatives passed the Tax Cuts and Jobs Act by a vote of 227-205. Here is a summary of the major provisions in the final package.

The Economics of Permanent Corporate Rate Cuts Must Outweigh the Optics of Sunsetting Individual Tax Cuts

November 16, 2017

The Senate Tax Cuts and Jobs Act is right to make the most pro-growth policies permanent and sunset the ones that will do less economic harm.

Overview of the Senate’s Amendment to the Tax Cuts and Jobs Act

November 15, 2017

The Chairman's Mark of the Senate's Tax Cuts and Jobs Act includes a number of important changes. Here's a quick overview of those that matter most.

Who Gets a Tax Cut Under the Senate Tax Cuts and Jobs Act?

November 14, 2017

Here's how the individual income tax provisions of the Senate's Tax Cuts and Jobs Act would impact individuals and families across the income spectrum.

The Senate Tax Cuts and Jobs Act: The Impacts of Jobs and Incomes by State

November 10, 2017

See the state-by-state impact of the Senate Tax Cuts and Jobs Act for both new jobs and the boost to after-tax incomes for middle-income families.

Preliminary Details and Analysis of the Senate’s 2017 Tax Cuts and Jobs Act

November 10, 2017

This comprehensive overview of the of the Senate Tax Cuts and Jobs Act includes a summary of its details and macroeconomic analysis of how it would impact federal revenue, wages, GDP, and after-tax incomes.

Eight Important Changes in the Senate Tax Cuts and Jobs Act

November 10, 2017

The Senate Tax Cuts and Jobs Act includes hundreds of structural reforms to the tax code. Here is a guide to the eight most important changes.

Important Differences Between House and Senate Versions of the Tax Cuts and Jobs Act

November 10, 2017

This list, though not exhaustive, catalogues the major differences between the House and Senate version of the Tax Cuts and Jobs Act.

Details of the Senate Version of the Tax Cuts and Jobs Act

November 10, 2017

The Senate Tax Cuts and Jobs Act shares many things with its House counterpart, but also differs on several particulars. This guide consolidates all of the details of the Senate plan in one convenient location.

Small Pass-Through Businesses Would See Some Benefits Under the House Tax Cuts and Jobs Act

November 9, 2017

Even with large changes, many in the pass-through community are arguing that small pass-throughs don’t benefit since most or all of their taxable income falls below the 25 percent maximum rate. While correct on the small point, advocates miss the greater tax reform picture. Small pass-through businesses would still benefit from a number of other changes.

Response to Washington Center for Equitable Growth Tax Model Critique

November 9, 2017

The Tax Foundation is grateful for all constructive feedback on its estimates, and will continue to strive to estimate the economic, revenue, and distributional effects of tax changes with the greatest accuracy possible.

How The Tax Cut and Jobs Act Would Change International Business Taxation

November 7, 2017

One goal of the House Tax Cuts and Jobs Act is to move international business taxation to a territorial rather than a worldwide system. Here's how it would work.

Benefits of the House Tax Cuts and Jobs Act for the Lower-Middle Class

November 6, 2017

According to the Taxes and Growth model, the House Tax Cuts and Jobs Act should increase after-tax income by 4.5 percent for those in the second-lowest quintile, and by 4.6 percent for those in the middle quintile.

How the State and Local Tax Deduction Interacts with the AMT and Pease Limitation

November 6, 2017

The way the state and local tax deduction, alternative minimum tax, and Pease limitation interact is complex. This primer makes things easier to understand.

Time to Shoulder Aside “Crowding Out” As an Excuse Not to Do Tax Reform

November 7, 2017

This paper evaluates the arguments for and against “crowding out” and compares these arguments to empirical studies. It discusses the impact of tax changes on the allocation of national income between consumption and saving, and the allocation of saving between private investment and government deficits. It finds that the crowding out argument is largely based on a mistaken assumption about the flexibility and availability of saving and credit for the financing of government deficits and private investment.

The House Tax Cuts and Jobs Act: The Impacts on Jobs and Incomes by State

November 3, 2017

See the state-by-state impact of the Tax Cuts and Jobs Act for both new jobs and the boost to after-tax incomes for middle-income families.

House Tax Cuts and Jobs Act Would Substantially Improve the U.S.’s International Tax Competitiveness

November 3, 2017

Considered as a whole, this plan would make the U.S. substantially more competitive, not only due to lower rates but also due to a better tax structure.

Explaining the Pass-Through Income Anti-Abuse Rules in the House Tax Cuts and Jobs Act

November 3, 2017

Though admittedly complex, the pass-through anti-abuse rules in the Tax Cuts & Jobs Act represent a well-thought-out approach to dealing with this issue.

Eight Important Changes in the House Tax Cuts and Jobs Act

November 2, 2017

The widely anticipated House Tax Cuts and Jobs Act includes hundreds of structural changes to the tax code. Here are the eight most important provisions in no particular order.

Details of the House Tax Cuts and Jobs Act

November 2, 2017

The House Tax Cuts and Jobs act would fundamentally reform the U.S. tax code for the first time in over 30 years. Here are all the important details.

Updated Details and Analysis of the 2017 House Tax Cuts and Jobs Act

November 3, 2017

This comprehensive overview of the of the House Tax Cuts and Jobs Act includes a summary of its details and macroeconomic analysis of how it would impact federal revenue, wages, GDP, and after-tax incomes.

Five Implications of Retaining the Property Tax Deduction Under Federal Tax Reform

October 30, 2017

To achieve meaningful tax reform, Congress will require significant base-broadeners. Saving the property tax deduction makes the math more difficult, but still leaves clear paths forward.

Measuring Marginal Tax Rate on Capital Assets

December 12, 2017

This study demonstrates how Tax Foundation’s TAG model calculates the weighted average METRs for different capital assets in the corporate and noncorporate sectors. The high marginal rates of up to 53 percent in the corporate sector illustrate why there is an urgent need for business tax reform.

The Jobs and Wage Effects of a Corporate Rate Cut

October 25, 2017

Corporate tax reform done right is key to growing the economy, boosting real family incomes, and making the U.S. a better place in which to do business.

There Is More Than Meets the Eye When Analyzing the UK’s Corporate Tax Cut

October 25, 2017

When taking a closer look at the UK’s recent corporate tax reform experiment, it becomes clear that there was significantly more at work than just a simple rate cut. Increasing the effective marginal tax rate on new investments could have had a negative effect on wages, potentially offsetting the positive effects from the corporate rate cut.

Labor Bears Much of the Cost of the Corporate Tax

October 24, 2017

Recent empirical evidence shows that workers bear upwards of 70 percent of the corporate income tax burden, much more than popular tax models claim, which make errors in how they account for super-normal returns and the openness of our economy.

How the State and Local Tax Deduction Influences State Tax Policy

October 18, 2017

The state and local tax deduction isn't just a costly federal subsidy. It also skews state and local tax policy decisions.

Examining Different Assumptions About the Republican Framework’s Impact on Lower Middle-Income Households

October 16, 2017

The broad conclusion here is that, in drafting the Republican Framework, lawmakers have left themselves with at least one significant lever for delivering middle class tax relief: the child tax credit.

Options for Improving Cost Recovery for Structures

October 11, 2017

If lawmakers are looking to maximize the positive economic effects from a tax bill, then improving tax depreciation for structures should probably be part of the conversation. Here are a few options.

Economic and Budgetary Impact of Temporary Expensing

October 4, 2017

Instead of making expensing temporary, lawmakers could pursue other ways to speed up cost recovery with permanent economic gains and without drastically reducing revenue. One way to do that is by enacting “depreciation indexing.”

Testimony: The Startup Slump: Can Tax Reform Help Revive American Entrepreneurship?

October 3, 2017

Tax reform should aim to get the tax code out of the way of entrepreneurship by making it simpler, less burdensome, and eliminating its anti-growth biases.

What Would the “Big Six” Framework Mean for Lower-Middle Income Households?

September 29, 2017

Based on the details we have, the Big Six tax plan would lower taxes on the bottom 80% of taxpayers, and raise the tax burden on the top 20% of taxpayers.

Eliminating the SALT Deduction Under the “Big Six” Tax Plan

September 27, 2017

The state and local tax deduction favors high-income individuals in high-tax states. Six states—California, New York, New Jersey, Illinois, Texas, and Pennsylvania—claim more than half of the value of the deduction.

Is the State and Local Tax Deduction in Place to Protect Against Double Taxation?

September 21, 2017

Repealing the state and local tax deduction will be an important part of pro-growth tax reform. Eliminating the deduction would free up $1.8 trillion to use for lowering rates across the board. Special interest groups will want you to think this deduction protects you against double taxation. Don’t fall for it.

The Four Pillars of Corporate Tax Reform: Testimony before the Senate Finance Committee

September 19, 2017

The most important thing that Congress and the administration can do to boost economic growth, lift workers’ wages, create jobs, and make the U.S. economy more competitive globally, is reform our business tax system.

What Rothification Means for Tax Reform

September 12, 2017

While no concrete plans for Rothification have been proposed, House GOP Republicans have kept the possibility on the table. Here's what you should know.

Why Temporary Corporate Income Tax Cuts Won’t Generate Much Growth

June 12, 2017

Real tax reform should boost incomes for all. A corporate income tax cut could be a means to do that, but not if it's temporary. A temporary cut is less likely to promote growth and less likely to benefit American workers.

The Tax Foundation’s Taxes and Growth Model

April 11, 2018

In an attempt to provide a realistic, data-driven analysis of federal tax policy, the Tax Foundation has developed a General Equilibrium Model to simulate the effects of tax policies on the economy and on government revenues and budgets.

The State and Local Tax Deduction: A Primer

March 15, 2017

Taxpayers who itemize deductions on their federal income tax are permitted to deduct certain taxes paid to state and local governments from their gross income for federal income tax liability purposes.

Federal Tax Reform: The Impact on States

March 8, 2017

The federal government could pass comprehensive tax reform for the first time since 1986. Any federal tax change would impact state budgets, as most states tie their tax codes to the federal code. Here's what states should expect and the options they'll have if federal reform happens.

Introducing the Tax Foundation’s 2018 Tax Reform Calculator

February 8, 2018

The Tax Foundation's 2018 tax reform calculator shows you how the Tax Cuts and Jobs Act will impact take-home incomes, taxes owed, and more.

State Strategies to Preserve SALT Deductions for High-Income Taxpayers: Will They Work?

January 5, 2018

The scramble to restore the full state and local tax deduction for high-income taxpayers has resulted in inventive proposals that, for both legal and practical reasons, are unlikely to succeed.

Who Gets a Tax Cut Under the Tax Cuts and Jobs Act?

December 19, 2017

How would the Tax Cuts and Jobs Act impact different households? Check out our sample taxpayers to see what would change if the bill is enacted.

The Tax Cuts and Jobs Act: The Impacts of Jobs and Incomes by State

December 18, 2017

Overall, the Tax Cuts and Jobs Act is projected to add 339,000 new jobs to the U.S. economy and boost average after-tax incomes for middle-income families by $649.43. Here's how jobs and after-tax wages will be impacted in your state.

Preliminary Details and Analysis of the Tax Cuts and Jobs Act

December 18, 2017

According to the Tax Foundation’s Taxes and Growth Model, the Tax Cuts and Jobs Act would lead to a 1.7 percent increase in GDP over the long term, 1.5 percent higher wages, an additional 339,000 full-time equivalent jobs, and cost $1.47 trillion on a static basis and by $448 billion on a dynamic basis.

Details of the Conference Report for the Tax Cuts and Jobs Act

December 15, 2017

Important Differences Between the House and Senate Tax Reform Bills Heading into Conference

December 2, 2017

The House and Senate have both passed legislation that would overhaul the federal tax code. Learn about the key differences between the two bills.

Key Changes in Senate Tax Reform Bill Heading into the Vote-a-Rama

December 1, 2017

A brief summary of the most notable provisions of the Senate Tax Cuts and Jobs Act in the form in which it enters the “vote-a-rama.”

International Provisions in the Senate Tax Cuts and Jobs Act

November 28, 2017

The Senate’s version of the Tax Cuts and Jobs Act (TCJA) includes several important changes to the taxation of multinational corporations.

Who Gets a Tax Cut Under the Amended Senate Tax Cuts and Jobs Act?

November 21, 2017

Here's how the individual income tax provisions of the amended Senate's Tax Cuts and Jobs Act would impact individuals and families across the income spectrum.

The House Takes a Big Step Forward on Tax Reform

November 16, 2017

The House of Representatives passed the Tax Cuts and Jobs Act by a vote of 227-205. Here is a summary of the major provisions in the final package.

The Economics of Permanent Corporate Rate Cuts Must Outweigh the Optics of Sunsetting Individual Tax Cuts

November 16, 2017

The Senate Tax Cuts and Jobs Act is right to make the most pro-growth policies permanent and sunset the ones that will do less economic harm.

Overview of the Senate’s Amendment to the Tax Cuts and Jobs Act

November 15, 2017

The Chairman's Mark of the Senate's Tax Cuts and Jobs Act includes a number of important changes. Here's a quick overview of those that matter most.

The Senate Tax Cuts and Jobs Act: The Impacts of Jobs and Incomes by State

November 10, 2017

See the state-by-state impact of the Senate Tax Cuts and Jobs Act for both new jobs and the boost to after-tax incomes for middle-income families.

Preliminary Details and Analysis of the Senate’s 2017 Tax Cuts and Jobs Act

November 10, 2017

This comprehensive overview of the of the Senate Tax Cuts and Jobs Act includes a summary of its details and macroeconomic analysis of how it would impact federal revenue, wages, GDP, and after-tax incomes.

Eight Important Changes in the Senate Tax Cuts and Jobs Act

November 10, 2017

The Senate Tax Cuts and Jobs Act includes hundreds of structural reforms to the tax code. Here is a guide to the eight most important changes.

Important Differences Between House and Senate Versions of the Tax Cuts and Jobs Act

November 10, 2017

This list, though not exhaustive, catalogues the major differences between the House and Senate version of the Tax Cuts and Jobs Act.

Details of the Senate Version of the Tax Cuts and Jobs Act

November 10, 2017

The Senate Tax Cuts and Jobs Act shares many things with its House counterpart, but also differs on several particulars. This guide consolidates all of the details of the Senate plan in one convenient location.

Benefits of the House Tax Cuts and Jobs Act for the Lower-Middle Class

November 6, 2017

According to the Taxes and Growth model, the House Tax Cuts and Jobs Act should increase after-tax income by 4.5 percent for those in the second-lowest quintile, and by 4.6 percent for those in the middle quintile.

The House Tax Cuts and Jobs Act: The Impacts on Jobs and Incomes by State

November 3, 2017

See the state-by-state impact of the Tax Cuts and Jobs Act for both new jobs and the boost to after-tax incomes for middle-income families.

House Tax Cuts and Jobs Act Would Substantially Improve the U.S.’s International Tax Competitiveness

November 3, 2017

Considered as a whole, this plan would make the U.S. substantially more competitive, not only due to lower rates but also due to a better tax structure.

Explaining the Pass-Through Income Anti-Abuse Rules in the House Tax Cuts and Jobs Act

November 3, 2017

Though admittedly complex, the pass-through anti-abuse rules in the Tax Cuts & Jobs Act represent a well-thought-out approach to dealing with this issue.

Eight Important Changes in the House Tax Cuts and Jobs Act

November 2, 2017

The widely anticipated House Tax Cuts and Jobs Act includes hundreds of structural changes to the tax code. Here are the eight most important provisions in no particular order.

Details of the House Tax Cuts and Jobs Act

November 2, 2017

The House Tax Cuts and Jobs act would fundamentally reform the U.S. tax code for the first time in over 30 years. Here are all the important details.

Updated Details and Analysis of the 2017 House Tax Cuts and Jobs Act

November 3, 2017

This comprehensive overview of the of the House Tax Cuts and Jobs Act includes a summary of its details and macroeconomic analysis of how it would impact federal revenue, wages, GDP, and after-tax incomes.

What Would the “Big Six” Framework Mean for Lower-Middle Income Households?

September 29, 2017

Based on the details we have, the Big Six tax plan would lower taxes on the bottom 80% of taxpayers, and raise the tax burden on the top 20% of taxpayers.

The Four Pillars of Corporate Tax Reform: Testimony before the Senate Finance Committee

September 19, 2017

The most important thing that Congress and the administration can do to boost economic growth, lift workers’ wages, create jobs, and make the U.S. economy more competitive globally, is reform our business tax system.

The State and Local Tax Deduction: A Primer

March 15, 2017

Taxpayers who itemize deductions on their federal income tax are permitted to deduct certain taxes paid to state and local governments from their gross income for federal income tax liability purposes.

Federal Tax Reform: The Impact on States

March 8, 2017

The federal government could pass comprehensive tax reform for the first time since 1986. Any federal tax change would impact state budgets, as most states tie their tax codes to the federal code. Here's what states should expect and the options they'll have if federal reform happens.

Pass-Through Deduction Won’t Flow Through to Most States

December 19, 2017

For policymakers in most states, the fact that the pass-through deduction doesn’t affect AGI should come as a relief. For those in the six states which use federal taxable income as their starting point for conformity, decoupling from the provision is an entirely viable option.

Conference Report Limits on Interest Deductions

December 17, 2017

There is no good reason to eliminate interest deductions to permit expensing. Expensing is a key element of any tax system which seeks to put all economic activity on a level playing field.

Tax Cuts and Jobs Act Puts the U.S. with its International Peers

December 15, 2017

If enacted, the Tax Cuts and Jobs Act would put the U.S. corporate tax rate more in line with its international peers at 13th highest of 35 OECD countries.

House and Senate Bill Limits on Interest Deductions

December 13, 2017

Replacing the 20 Percent Corporate Rate with Rates of 21 or 22 Percent Has Real Economic Consequences

December 8, 2017

International Provisions in the Senate Tax Cuts and Jobs Act

November 28, 2017

The Senate’s version of the Tax Cuts and Jobs Act (TCJA) includes several important changes to the taxation of multinational corporations.

Senate Tax Reform Bill Restricts Choice of Which Shares to Sell First

November 27, 2017

Are Pass-Through Businesses Treated Fairly Under the Senate Version of the Tax Cuts and Jobs Act?

November 17, 2017

A more careful look shows that the Senate Tax Cuts and Jobs Act doesn't put pass-through businesses at a disadvantage compared to C corporations.

The Economics of Permanent Corporate Rate Cuts Must Outweigh the Optics of Sunsetting Individual Tax Cuts

November 16, 2017

The Senate Tax Cuts and Jobs Act is right to make the most pro-growth policies permanent and sunset the ones that will do less economic harm.

Small Pass-Through Businesses Would See Some Benefits Under the House Tax Cuts and Jobs Act

November 9, 2017

Even with large changes, many in the pass-through community are arguing that small pass-throughs don’t benefit since most or all of their taxable income falls below the 25 percent maximum rate. While correct on the small point, advocates miss the greater tax reform picture. Small pass-through businesses would still benefit from a number of other changes.

How The Tax Cut and Jobs Act Would Change International Business Taxation

November 7, 2017

One goal of the House Tax Cuts and Jobs Act is to move international business taxation to a territorial rather than a worldwide system. Here's how it would work.

House Tax Cuts and Jobs Act Would Substantially Improve the U.S.’s International Tax Competitiveness

November 3, 2017

Considered as a whole, this plan would make the U.S. substantially more competitive, not only due to lower rates but also due to a better tax structure.

Explaining the Pass-Through Income Anti-Abuse Rules in the House Tax Cuts and Jobs Act

November 3, 2017

Though admittedly complex, the pass-through anti-abuse rules in the Tax Cuts & Jobs Act represent a well-thought-out approach to dealing with this issue.

The Jobs and Wage Effects of a Corporate Rate Cut

October 25, 2017

Corporate tax reform done right is key to growing the economy, boosting real family incomes, and making the U.S. a better place in which to do business.

There Is More Than Meets the Eye When Analyzing the UK’s Corporate Tax Cut

October 25, 2017

When taking a closer look at the UK’s recent corporate tax reform experiment, it becomes clear that there was significantly more at work than just a simple rate cut. Increasing the effective marginal tax rate on new investments could have had a negative effect on wages, potentially offsetting the positive effects from the corporate rate cut.

Labor Bears Much of the Cost of the Corporate Tax

October 24, 2017

Recent empirical evidence shows that workers bear upwards of 70 percent of the corporate income tax burden, much more than popular tax models claim, which make errors in how they account for super-normal returns and the openness of our economy.

Options for Improving Cost Recovery for Structures

October 11, 2017

If lawmakers are looking to maximize the positive economic effects from a tax bill, then improving tax depreciation for structures should probably be part of the conversation. Here are a few options.

Economic and Budgetary Impact of Temporary Expensing

October 4, 2017

Instead of making expensing temporary, lawmakers could pursue other ways to speed up cost recovery with permanent economic gains and without drastically reducing revenue. One way to do that is by enacting “depreciation indexing.”

Testimony: The Startup Slump: Can Tax Reform Help Revive American Entrepreneurship?

October 3, 2017

Tax reform should aim to get the tax code out of the way of entrepreneurship by making it simpler, less burdensome, and eliminating its anti-growth biases.

The Four Pillars of Corporate Tax Reform: Testimony before the Senate Finance Committee

September 19, 2017

The most important thing that Congress and the administration can do to boost economic growth, lift workers’ wages, create jobs, and make the U.S. economy more competitive globally, is reform our business tax system.

Why Temporary Corporate Income Tax Cuts Won’t Generate Much Growth

June 12, 2017

Real tax reform should boost incomes for all. A corporate income tax cut could be a means to do that, but not if it's temporary. A temporary cut is less likely to promote growth and less likely to benefit American workers.

Introducing the Tax Foundation’s 2018 Tax Reform Calculator

February 8, 2018

The Tax Foundation's 2018 tax reform calculator shows you how the Tax Cuts and Jobs Act will impact take-home incomes, taxes owed, and more.

New York Taxpayers Must Pay for Ill-Advised Lawsuit Seeking Tax Cuts for Wealthiest Residents

January 26, 2018

New York, New Jersey, and Connecticut are pursuing a questionable legal strategy to overturn the cap on a federal tax deduction that benefits the wealthy.

State Strategies to Preserve SALT Deductions for High-Income Taxpayers: Will They Work?

January 5, 2018

The scramble to restore the full state and local tax deduction for high-income taxpayers has resulted in inventive proposals that, for both legal and practical reasons, are unlikely to succeed.

Retirement Savings Left Largely Untouched by Tax Reform

January 3, 2018

While rumors flew around Washington in the fall that the Tax Cuts and Jobs Act would dramatically impact retirement savings accounts, the plan has made only a few minor modifications.

SALT Update: Property Tax Prepayments Need an Assessment

December 27, 2017

Who Gets a Tax Cut Under the Tax Cuts and Jobs Act?

December 19, 2017

How would the Tax Cuts and Jobs Act impact different households? Check out our sample taxpayers to see what would change if the bill is enacted.

Prepaying SALT isn’t an Option

December 17, 2017

As the Tax Cuts and Jobs Act seeks to simplify the tax code, a last-minute provision closed a potential new tax-planning strategy germinating before the bill even passed.

Under Conference Agreement, Fewer Households Would Face the Alternative Minimum Tax

December 16, 2017

The Tax Cuts and Jobs Act will temporarily reduce alternative minimum tax liability, but retain the complexity inherent to the tax.

Three Points on the Mortgage Interest Deduction

December 8, 2017

Visualizing the Static Impact of the Tax Cuts and Jobs Act on 25,000 Taxpayers

November 28, 2017

Who Gets a Tax Cut Under the Amended Senate Tax Cuts and Jobs Act?

November 21, 2017

Here's how the individual income tax provisions of the amended Senate's Tax Cuts and Jobs Act would impact individuals and families across the income spectrum.

Understanding JCT’s New Distributional Tables for the Senate’s Tax Cuts and Jobs Act

November 16, 2017

Much attention is being paid to distributional tables released by JCT on the Senate's Tax Cuts and Jobs Act, but their results don’t quite seem to show what some are suggesting. While the results appears to show a tax increase for some lower-income filers, this is due to the unique nature of the individual mandate and the premium tax credits available under the Affordable Care Act.

The Economics of Permanent Corporate Rate Cuts Must Outweigh the Optics of Sunsetting Individual Tax Cuts

November 16, 2017

The Senate Tax Cuts and Jobs Act is right to make the most pro-growth policies permanent and sunset the ones that will do less economic harm.

Who Gets a Tax Cut Under the Senate Tax Cuts and Jobs Act?

November 14, 2017

Here's how the individual income tax provisions of the Senate's Tax Cuts and Jobs Act would impact individuals and families across the income spectrum.

Benefits of the House Tax Cuts and Jobs Act for the Lower-Middle Class

November 6, 2017

According to the Taxes and Growth model, the House Tax Cuts and Jobs Act should increase after-tax income by 4.5 percent for those in the second-lowest quintile, and by 4.6 percent for those in the middle quintile.

The House Tax Cuts and Jobs Act: The Impacts on Jobs and Incomes by State

November 3, 2017

See the state-by-state impact of the Tax Cuts and Jobs Act for both new jobs and the boost to after-tax incomes for middle-income families.

Eight Important Changes in the House Tax Cuts and Jobs Act

November 2, 2017

The widely anticipated House Tax Cuts and Jobs Act includes hundreds of structural changes to the tax code. Here are the eight most important provisions in no particular order.

The Jobs and Wage Effects of a Corporate Rate Cut

October 25, 2017

Corporate tax reform done right is key to growing the economy, boosting real family incomes, and making the U.S. a better place in which to do business.

Examining Different Assumptions About the Republican Framework’s Impact on Lower Middle-Income Households

October 16, 2017

The broad conclusion here is that, in drafting the Republican Framework, lawmakers have left themselves with at least one significant lever for delivering middle class tax relief: the child tax credit.

What Would the “Big Six” Framework Mean for Lower-Middle Income Households?

September 29, 2017

Based on the details we have, the Big Six tax plan would lower taxes on the bottom 80% of taxpayers, and raise the tax burden on the top 20% of taxpayers.

What Rothification Means for Tax Reform

September 12, 2017

While no concrete plans for Rothification have been proposed, House GOP Republicans have kept the possibility on the table. Here's what you should know.

New York Taxpayers Must Pay for Ill-Advised Lawsuit Seeking Tax Cuts for Wealthiest Residents

January 26, 2018

New York, New Jersey, and Connecticut are pursuing a questionable legal strategy to overturn the cap on a federal tax deduction that benefits the wealthy.

More States Considering Dubious SALT Charitable Contribution Workaround

January 25, 2018

California's plan to circumvent the new state and local tax deduction cap is dubious, but now Illinois, Nebraska, Virginia, and Washington are considering similar plans.

State Strategies to Preserve SALT Deductions for High-Income Taxpayers: Will They Work?

January 5, 2018

The scramble to restore the full state and local tax deduction for high-income taxpayers has resulted in inventive proposals that, for both legal and practical reasons, are unlikely to succeed.

SALT Update: Property Tax Prepayments Need an Assessment

December 27, 2017

States Estimating Revenue Increases from Federal Tax Bill; Montana One Exception So Far

December 21, 2017

Does Your State’s Corporate Income Tax Code Conform with the Federal Tax Code?

December 20, 2017

Whether your state's corporate income tax code conforms to the federal corporate income tax code matters a great deal for how the Tax Cuts and Jobs Act will impact revenue in your state.

Pass-Through Deduction Won’t Flow Through to Most States

December 19, 2017

For policymakers in most states, the fact that the pass-through deduction doesn’t affect AGI should come as a relief. For those in the six states which use federal taxable income as their starting point for conformity, decoupling from the provision is an entirely viable option.

The Tax Cuts and Jobs Act: The Impacts of Jobs and Incomes by State

December 18, 2017

Overall, the Tax Cuts and Jobs Act is projected to add 339,000 new jobs to the U.S. economy and boost average after-tax incomes for middle-income families by $649.43. Here's how jobs and after-tax wages will be impacted in your state.

Prepaying SALT isn’t an Option

December 17, 2017

As the Tax Cuts and Jobs Act seeks to simplify the tax code, a last-minute provision closed a potential new tax-planning strategy germinating before the bill even passed.

High-Tax States are Inconsistent on the State and Local Tax Deduction

December 12, 2017

If the state and local tax deduction is necessary to prevent double taxation, why don’t states offer a deduction for federal and local taxes?

Does Your State’s Individual Income Tax Code Conform with the Federal Tax Code?

December 13, 2017

As the federal government continues to debate tax reform, states, and many taxpayers, are asking an important question: How is my state’s tax code impacted? The exact impacts won’t be known until the federal bill is finalized, but a good place to start is understanding the issue of conformity.

Seven Things States Should Monitor in the Federal Tax Bill

December 4, 2017

NCSL May Revisit Stance Fighting State & Local Tax Deduction Repeal

November 20, 2017

The National Conference of State Legislatures may revisit a decision to reject tax reform that repeals the state and local tax deduction.

Federal Tax Reform Might Push New Jersey to Reform Tax System

November 20, 2017

New Jersey has the worst state business tax climate of the 50 states and the third highest state and local tax burden. If federal tax reform prompts New Jersey to overhaul its tax code, it’s long overdue.

The Senate Tax Cuts and Jobs Act: The Impacts of Jobs and Incomes by State

November 10, 2017

See the state-by-state impact of the Senate Tax Cuts and Jobs Act for both new jobs and the boost to after-tax incomes for middle-income families.

How the State and Local Tax Deduction Interacts with the AMT and Pease Limitation

November 6, 2017

The way the state and local tax deduction, alternative minimum tax, and Pease limitation interact is complex. This primer makes things easier to understand.

The House Tax Cuts and Jobs Act: The Impacts on Jobs and Incomes by State

November 3, 2017

See the state-by-state impact of the Tax Cuts and Jobs Act for both new jobs and the boost to after-tax incomes for middle-income families.

Five Implications of Retaining the Property Tax Deduction Under Federal Tax Reform

October 30, 2017

To achieve meaningful tax reform, Congress will require significant base-broadeners. Saving the property tax deduction makes the math more difficult, but still leaves clear paths forward.

How the State and Local Tax Deduction Influences State Tax Policy

October 18, 2017

The state and local tax deduction isn't just a costly federal subsidy. It also skews state and local tax policy decisions.

Eliminating the SALT Deduction Under the “Big Six” Tax Plan

September 27, 2017

The state and local tax deduction favors high-income individuals in high-tax states. Six states—California, New York, New Jersey, Illinois, Texas, and Pennsylvania—claim more than half of the value of the deduction.

Is the State and Local Tax Deduction in Place to Protect Against Double Taxation?

September 21, 2017

Repealing the state and local tax deduction will be an important part of pro-growth tax reform. Eliminating the deduction would free up $1.8 trillion to use for lowering rates across the board. Special interest groups will want you to think this deduction protects you against double taxation. Don’t fall for it.

The State and Local Tax Deduction: A Primer

March 15, 2017

Taxpayers who itemize deductions on their federal income tax are permitted to deduct certain taxes paid to state and local governments from their gross income for federal income tax liability purposes.

Federal Tax Reform: The Impact on States

March 8, 2017

The federal government could pass comprehensive tax reform for the first time since 1986. Any federal tax change would impact state budgets, as most states tie their tax codes to the federal code. Here's what states should expect and the options they'll have if federal reform happens.

Preliminary Details and Analysis of the Tax Cuts and Jobs Act

December 18, 2017

According to the Tax Foundation’s Taxes and Growth Model, the Tax Cuts and Jobs Act would lead to a 1.7 percent increase in GDP over the long term, 1.5 percent higher wages, an additional 339,000 full-time equivalent jobs, and cost $1.47 trillion on a static basis and by $448 billion on a dynamic basis.

The Tax Cuts and Jobs Act: Preliminary Economic Analysis

December 18, 2017

According to the Tax Foundation’s Taxes and Growth Model, the Tax Cuts and Jobs Act would lead to a 1.7 percent increase in GDP over the long term, 1.5 percent higher wages, an additional 339,000 full-time equivalent jobs, and cost $1.47 trillion on a static basis and by $448 billion on a dynamic basis.

JCT’s Dynamic Score is Positive But Underestimates Economic Benefits

November 30, 2017

The Joint Committee on Taxation (JCT) dynamic scoring estimate of the Senate’s Tax Cuts and Jobs Act confirms that tax changes impact economic growth. While JCT’s estimates are positive, there is reason to believe that the tax plan would produce even greater dynamic effects than its analysis shows.

Understanding JCT’s New Distributional Tables for the Senate’s Tax Cuts and Jobs Act

November 16, 2017

Much attention is being paid to distributional tables released by JCT on the Senate's Tax Cuts and Jobs Act, but their results don’t quite seem to show what some are suggesting. While the results appears to show a tax increase for some lower-income filers, this is due to the unique nature of the individual mandate and the premium tax credits available under the Affordable Care Act.

Preliminary Details and Analysis of the Senate’s 2017 Tax Cuts and Jobs Act

November 10, 2017

This comprehensive overview of the of the Senate Tax Cuts and Jobs Act includes a summary of its details and macroeconomic analysis of how it would impact federal revenue, wages, GDP, and after-tax incomes.

Response to Washington Center for Equitable Growth Tax Model Critique

November 9, 2017

The Tax Foundation is grateful for all constructive feedback on its estimates, and will continue to strive to estimate the economic, revenue, and distributional effects of tax changes with the greatest accuracy possible.

Time to Shoulder Aside “Crowding Out” As an Excuse Not to Do Tax Reform

November 7, 2017

This paper evaluates the arguments for and against “crowding out” and compares these arguments to empirical studies. It discusses the impact of tax changes on the allocation of national income between consumption and saving, and the allocation of saving between private investment and government deficits. It finds that the crowding out argument is largely based on a mistaken assumption about the flexibility and availability of saving and credit for the financing of government deficits and private investment.

Updated Details and Analysis of the 2017 House Tax Cuts and Jobs Act

November 3, 2017

This comprehensive overview of the of the House Tax Cuts and Jobs Act includes a summary of its details and macroeconomic analysis of how it would impact federal revenue, wages, GDP, and after-tax incomes.

Measuring Marginal Tax Rate on Capital Assets

December 12, 2017

This study demonstrates how Tax Foundation’s TAG model calculates the weighted average METRs for different capital assets in the corporate and noncorporate sectors. The high marginal rates of up to 53 percent in the corporate sector illustrate why there is an urgent need for business tax reform.

Labor Bears Much of the Cost of the Corporate Tax

October 24, 2017

Recent empirical evidence shows that workers bear upwards of 70 percent of the corporate income tax burden, much more than popular tax models claim, which make errors in how they account for super-normal returns and the openness of our economy.

The Tax Foundation’s Taxes and Growth Model

April 11, 2018

In an attempt to provide a realistic, data-driven analysis of federal tax policy, the Tax Foundation has developed a General Equilibrium Model to simulate the effects of tax policies on the economy and on government revenues and budgets.